Friday, November 28, 2008

I moved to Mumbai six years ago from New York City, and I have seen India change with each terrorist attack. Wednesday night's attack will prove a defining turning point. India will go from being "resiliently defensive" to "resolutely offensive."

To understand the impact on the financial capital of India one needs to know the unique place the Taj Mahal Hotel and the Oberoi Complex (both the Oberoi Trident and the Oberoi) play in the fabric of the city's life, especially for its professionals. The Taj Mahal Hotel and the Oberoi Complex are not just the Four Seasons and Pierre of New York City. They are Mumbai's lifeline and blood.

As a consultant and a hedge fund manager, I, like thousands of Mumbai professionals, could count on being at these hotels two to three times a week. In any given week, more than a dozen conferences are being held at either hotel attended by the city's lawyers, bankers, consultants and entrepreneurs. The hotels are the Ellis Island for foreign firms and foreign professionals. Whole floors of these hotels serve as offices. The first outpost office of any major MNC is the Taj or the Oberoi: McKinsey, Blackstone, Texas Pacific Group, the list is endless.

But the hotels are much more than financial destinations; they are cultural centers. The best bookshop in Mumbai is in the Taj. Out of the 10 best restaurants in the city, half are in these two hotels. After a late night out, the 24 hour coffee shops of both hotels are filled with young people using them as late-night diners. Visit these same coffee shops in the day and you might see two families having a cup of tea discussing a matrimonial alliance. For a Mumbaiker, these hotels serve as a second home.

Every Indian is familiar with the Taj, its iconic red brick architecture façade serves as the backdrop for so many stories and Bollywood movies. So when Sonia Gandhi, the President of the ruling Congress Party, says that these are attacks on India's prestige, she means it.If the attacks on the two hotels were not enough, the CST train terminal was hit. One out of every 10 commuters uses the CST (formerly known as the Victoria Terminus) daily. And after attacking the CST, the terrorists hit the Cama Hospital, a hospital for women and children. The last major target was a Jewish center. Mumbai has housed an Iraqi Jewish community for centuries. Not once have they been targeted. That has changed.

These attacks are going to serve as a tipping point for India. India has had no less than 10 terrorist attacks over the last five years described as India's 9/11. And so now is the latest assault.

As the Indian landscape changed, so has the Indian attitude. The first Bollywood movie on the attacks highlighted the resilience of Mumbai citizens. But in conversations, writings and film, people have shifted from resilience to wanting revenge. One of the most successful movies of 2008 highlights an ordinary citizen taking revenge. The surprise hit of 2008 in India is a low-budget thriller called "Wednesday." "Wednesday" is a taut thriller where the audience is held in suspense. The person the audience believes is a terrorist hell-bent on releasing his jailed compatriots is actually a vigilante. He doesn't secure the release; he blows them up. The audience cheers as he tells the police, "We (the people) are tired of being resilient. Our hands are not tied, we too can hit back." Audiences around the country clapped and cheered his soliloquy. And now with these attacks, the attitude hardens even more. CNN-IBN, the local English news channel, not known for hyperbole, is calling its coverage not Terror in Mumbai, but "War on Mumbai." Local anchors refer to the rescue operations as urban warfare.

Last week, at an Indian leadership summit, I watched Shashi Tharoor, the former U.N. Undersecretary General and India's candidate to be Secretary General, ask Henry Kissinger how India should react to Pakistani agents attacking the Indian Embassy in Kabul. Mr. Kissinger said it wasn't his place to answer. Fair enough, but the question remains what should India do?India faces tough decisions over the next few weeks and months. Every time India has been hit, there has be no counter reaction. The vast majority of Indians believe that the attacks emanate from Pakistan. While most Indians don't blame Pakistanis, they do blame instruments and agents of the Pakistani government, specifically the ISI. With the bombing in Kabul, the U.S. confirmed that the ISI was involved adding an independent credible voice to India's charges of Pakistani involvement.

In his first speech on Thursday to the nation, Prime Minister Manmohan Singh said "It is evident that the group which carried out these attacks, based outside the country, had come with single-minded determination to create havoc in the commercial capital." There is little doubt as to which country Prime Minister Singh has in mind.

The people will demand action against the masterminds of the attacks. And perception in India is that it is the ISI guides and masterminds the attacks. Elections in India are in due in the next six months and pressure will mount on the Indian government to act. Joe Biden was right, Barack Obama will face an international test in the first six months. South Asia looks to be that test.